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Thursday, February 16, 2017

Inflation Finally Rears Its Head -- Peter Schiff

The Peter Schiff Show Podcast - Episode 228

Transcript :
and leadership shows we had a very
0:09
significant day in the currency and gold
0:13
market yesterday in fact that almost
0:15
recording the podcast yesterday but
0:17
maybe it's even better today because we
0:19
had some good follow-through today and
0:22
it really buttresses the point that i
0:24
want to make and what happened was we
0:27
got some economic news that was released
0:30
yesterday that would have been
0:32
considered bullish for the dollar and
0:36
bearish four goals by most of the people
0:39
are pretty much all the people probably
0:41
other than me you know who trade
0:44
currencies and who trade gold but the
0:46
fact that gold did not sell off for the
0:50
dollars did not rally was very
0:52
significant now the news that we got was
0:55
the CPI and retail sales
0:58
first of all over retail sales that came
1:00
out the same time but retail sales came
1:02
out stronger than expected they were
1:04
looking for a gain of 2.1 and we gotta
1:08
gained 2.4 and they actually revised
1:10
prior months gain from up points62 up
1:13
one now a lot of the gain in retail
1:16
sales though has to do with the fact
1:18
that prices are higher because retail
1:21
sales are not adjusted for inflation so
1:23
if prices are going up that means retail
1:26
sales maybe going on particularly up
1:28
like you look at things for like
1:29
gasoline right
1:30
gas prices people by about the same
1:32
amount of gas whether the price goes up
1:34
or not and so gas prices go up then that
1:37
is going to contribute to higher retail
1:39
sales but it's not just the price of gas
1:40
is going up prices everything is going
1:43
up the CPI came out at the same time as
1:47
retail sales and that I think is the
1:49
bigger number we got a point six percent
1:53
rise in consumer prices that's versus
1:57
the point three percent that had been
1:59
expected and even the core right to take
2:02
out food and energy we were up point
2:04
three there versus an estimate point2
2:07
year-over-year CPI is now up to 2.5
2:12
first
2:13
now that's the official number obviously
2:15
prices are going up a lot faster than
2:18
that but according to the government
2:21
they're going up a 2.5% even if you take
2:23
out food and energy and just look at the
2:25
core year-over-year that changes
2:28
two-point-three percent now remember the
2:30
Fed is saying their target is two
2:32
percent and when Janet Yellen testified
2:35
this week she said that she's confident
2:37
that we're going to hit her objective
2:39
but we're already surpassed her
2:42
objective the objective is to and where
2:45
a two-and-a-half and if you just look at
2:46
the core where 2.3 and of course if you
2:49
take that six tenths of a percent gain
2:52
from january what if we have six ten
2:54
percent every year from now to the end
2:56
of the year and what is that eight
2:58
percent inflation i'm not even sure i
3:00
didn't i didn't do the math the
3:01
compounded but obviously that is a very
3:04
very high number now as a result of this
3:06
number bowling sacks which had earlier
3:09
in the week and I mentioned this my last
3:11
podcast had moved the probability of a
3:14
market rate hike from fifteen percent to
3:17
twenty percent based on Janet yellen's
3:19
testimony yesterday increase the
3:23
probability from twenty percent to
3:25
thirty percent based on the higher CP on
3:28
but based on a CPI numbers this high
3:31
with interest rates this low the
3:35
probability should be 100-percent the
3:38
Fed should raise interest rates for sure
3:40
if they really cared about inflation in
3:43
fact they wouldn't even wait to march
3:44
they would raise them right now they
3:46
would have raised of the day this number
3:48
came out and they need to raise by more
3:50
than a quarter point the fact is only
3:52
thirty percent probability of a
3:54
quarter-point rate ice when you just
3:56
printed a six tenths of a percent
3:58
increase in consumer prices in January
4:00
two-and-a-half percent your rear end the
4:03
fed still got interest rates and a half
4:04
percent to 75 basis point obviously all
4:08
the people who were talking about the
4:09
Fed potentially falling behind the curve
4:12
has missed the obvious fact that they
4:14
fell behind the curve years ago and this
4:17
is a big acceleration inflation but what
4:20
I said that was very important was the
4:21
market reaction the need your reaction
4:24
was exactly what you would expect gold
4:26
sold
4:27
off about pen box and the dollar index
4:29
rally big round the dollar index but the
4:33
rally in the dollar didn't hold the
4:36
dollar index closed negative on the day
4:38
and then it dumped today it was down
4:40
closer to a full percent or 70 and gold
4:44
which ended up rallying yesterday
4:46
rallied again today we closed out just
4:49
under 12 40 and announce for the price
4:52
of gold and when you have a market that
4:54
won't go up on good news
4:57
meaning inflate higher inflation and a
4:59
higher probability of a rate hike right
5:01
that is good news for the dollar and the
5:04
dollar didn't go off it went down and
5:06
then it went down even more today the
5:08
opposite with gol gold did not go down
5:12
on bad news higher inflation the way
5:15
everybody else other than me has been
5:16
spinning it is that tire inflation is
5:19
bad for gold because it means we're
5:21
going to get rate hikes and gold went
5:23
off so when a market doesn't go down on
5:27
bad news it's going up and when the
5:30
market doesn't go up on good news it's
5:33
going down so meaning the dollars going
5:35
down and goal is going up and what I
5:37
think people are finally going to figure
5:39
out is it doesn't matter if the Fed
5:42
hikes rate because it's too little too
5:45
late
5:46
inflation is accelerating faster than
5:49
the rate hikes and as long as this head
5:51
stays behind the curve it will fall
5:53
further and further behind the curve
5:55
because these tiny increases in interest
5:58
rates spread out over a month will not
6:00
do anything to slow down the
6:02
acceleration in the rate of inflation so
6:06
the set is going to fall further and
6:08
further behind the curve as it raises
6:11
rates and there's no way that I think
6:13
they're going to accelerate and actually
6:15
deliver more rate hikes to the market
6:17
expects because they don't want to have
6:19
to deal with the aftermath in the stock
6:21
market in the bond market and the
6:23
economy and also i think people are
6:25
gonna start to figure out that higher
6:27
inflation is bad for the dollar I mean
6:30
the idea that higher inflation is good
6:32
for the dollar is asinine
6:33
what is higher inflation it means the
6:36
dollar is losing purchasing power prices
6:39
are going up
6:40
so the dollar is buying left so
6:42
inflation is bad for the dollar because
6:45
it means the dollars losing value the
6:47
only way that traders were able to
6:50
concoct this crazy explanation was that
6:54
the higher inflation would result in an
6:57
effort on the part of the Fed to spite
7:00
the inflation to stop it right and it
7:02
would do that by aggressively raising
7:04
rates so that was the idea all we have
7:06
more inflation now the Fed really has to
7:08
raise raids to rein it in and it was the
7:11
higher rate that were causing people
7:13
want to buy the dollar but when people
7:15
realized that even if the Fed raises
7:16
rates it won't be enough to slow down
7:19
the acceleration of inflation and so
7:22
that the dollar will continue to lose
7:23
purchasing power despite the increase in
7:26
interest rates and even though interest
7:28
rates are rising they will still be
7:30
below the rate of inflation so interest
7:33
rates will still be negative
7:35
all of this is very negative for the
7:38
dollar is bearish for the dollar and it
7:40
is bullish for goal again the flip side
7:43
of this crazy argument was that higher
7:46
inflation was bad for gold that is
7:48
absurd higher inflation is exactly why
7:51
people want to own goal now if you
7:53
believe that Janet Yellen is going to
7:55
channel paul volcker and gold medieval
7:58
on the markets right jack interest rates
8:00
way up and fight inflation will then you
8:03
can make an argument that it could be
8:04
buried for gold but there isn't a
8:06
snowball's chance in hell that she's
8:08
going to do she is going to allow the
8:11
inflation to get worse just just watch
8:14
they're going to be talking about this
8:15
they're still going to be talking about
8:16
trying to achieve their objective of 2%
8:18
even though inflation is well above two
8:20
percent and then they're going to start
8:22
to say well you know it's only a month
8:24
so now it's only two months we need to
8:26
we need to make extra certain that this
8:28
trend is really going to stay because
8:30
we're worried you know what if we get
8:32
some lower numbers and then they're
8:34
going to start talking about well you
8:35
know we were below two percent for so
8:38
long we can be above two percent for a
8:40
while just to balance it out i mean how
8:42
is it going to go four five six seven
8:45
before that actually have to acknowledge
8:47
that they've got a problem
8:49
they're still in denial but this is just
8:51
early
8:51
what's happening in the markets now and
8:53
I think that these trends now up and
8:57
gold down a dollar are just going to
8:59
accelerate and it doesn't matter whether
9:02
or not the Fed raises rates in march or
9:04
not right because the probability of a
9:06
height went up and the dollar went down
9:08
and gold went up anyway so even if the
9:11
Fed hikes it's not going to matter and
9:13
of course what if they don't like what
9:14
if they don't raise rates and I think
9:17
what's really going to happen i've been
9:18
saying this all is this recovery this
9:21
phony recovery is going to end right and
9:25
we're gonna be back in an official
9:27
recession the unemployment rate is going
9:29
to move up
9:30
it's not going to stay down at this
9:32
low-level people are going to try to
9:34
re-enter the labor force there aren't
9:36
going to be job their unemployment going
9:38
to go up layoffs are coming and what is
9:41
the Fed gonna do is defend going to jack
9:44
up race in the face of a weakening
9:46
economy and rising unemployment
9:48
not a chance they have to decide right
9:50
they have to pick which battles are
9:51
going to fight and what is the
9:53
politically popular battle to fight
9:55
unemployment right a weekend economy
9:58
you're not going to say you know we
9:59
don't care about unemployment we don't
10:01
care about the economy we're just gonna
10:03
raise race because inflation is to us
10:05
they're never going to see that
10:06
especially since the Fed believe that
10:09
there's a trade-off they believe in the
10:10
Phillips curve they actually think that
10:13
allowing there to be more inflation is
10:15
going to help the job market they think
10:17
it's going to help the economy as far as
10:19
they're concerned insulation is the
10:21
goose that lays the golden eggs
10:23
so why do they want to kill it right
10:24
they don't understand the real dynamics
10:27
or to be said that they do the last
10:29
thing we're going to do is level with
10:30
the American public and especially with
10:34
the Trump administration and the
10:35
Republican Congress I mean they're not
10:38
going to want to take the punchbowl away
10:40
for the Republicans when they kept it
10:41
you know filled to the brim under the
10:44
Democrats I mean imagine the you know
10:46
what your reaction would be if Janet
10:49
Yellen tried to raise rates into a
10:51
weekend economy into arriving interest
10:54
rate I mean that would enable the
10:56
republicans are trumped to blame the
10:57
fence for the problems that all this is
10:59
all political you would never be doing
11:01
this
11:01
it was a Democrat it was Hillary Clinton
11:03
or Barack Obama was still there means
11:05
you provided all the stimulus and now
11:07
what
11:08
just because I'm here you're trying to
11:09
put the blame on me by x rays and rate
11:12
so there's no reason to think that the
11:15
Fed would respond to the higher interest
11:17
rates by raising rates aggressively but
11:19
if they did if the Fed did raise rates
11:22
aggressively we would be a massive
11:24
recession this stock market crash the
11:27
bond market will crash the real estate
11:29
market crashed we would be in another
11:31
financial crisis and then what is the
11:32
biggest nothing i mean they're just
11:34
going to let everybody collapse there's
11:36
gonna be no bail out the next time we
11:38
have a financial crisis there's going to
11:39
be no stimulus does anybody believe that
11:41
no so even if they raise rates they're
11:43
gonna have to take it all back because
11:45
now they're going to be in another
11:46
financial crisis meanwhile we continue
11:49
to see surging gold stocks nobody is
11:53
talking about i said this on my last
11:54
popcap it's not climbing the wall worry
11:57
its climbing a wall of security
11:59
nobody has even noticed that gold stocks
12:02
are climbing this wall which is
12:03
fantastic i mean we don't even have any
12:05
big up things I mean we just we just go
12:08
up although some of those stocks that
12:09
good attorney say barrick gold was up
12:11
about six percent today so is Goldcorp
12:13
up about six percent so a couple of gold
12:15
stocks had better than expected earnings
12:17
so they were up a lot more than the
12:19
group but in general just even if you
12:21
look at the gtx unique out another one
12:23
percent gain today the gdxj
12:26
one-and-a-half percent again you know
12:28
these up everyday get all the reports
12:31
are about the dowel the dow actually
12:34
manage the game again today 18 points i
12:36
guess it's another record closing of the
12:37
transports although actually they were
12:39
only down to about 80 they rallied to
12:40
the clothes they were down a hundred
12:42
most of the day I think there is a
12:44
batteries reported one of the car rental
12:46
companies which were down quite a bit
12:47
they were down about a hundred points
12:49
which you know that's going to get worse
12:51
because there's this auto bubble there's
12:53
going to be a collapse and used-car
12:54
prices and that's a big problem for
12:56
these rental car companies that have a
12:58
lot of cars that they need to sell so
13:00
weekday there and the financials finally
13:03
had a down day I mean they weren't down
13:04
the law but this is an accident waiting
13:07
to happen and financial but you know
13:09
they're going to talk about the stock
13:10
market all a new record high in the dow
13:12
they're not going to talk about what's
13:14
going on
13:14
in the gold stocks and they're not going
13:16
to talk about what's going on in
13:17
emerging markets
13:18
I mean there are emerging market stocks
13:19
that I own that are up twenty thirty
13:22
forty percent this year they're not even
13:23
gold stocks right that's just stock in
13:25
emerging market that is what's going on
13:28
right now outside the united states and
13:30
these stocks are coming from
13:32
ridiculously low prices so even though
13:34
they're up a lot even though they're up
13:36
so much more than the us-backed market I
13:38
think they still have a lot more upside
13:40
to go because there's still cheap I mean
13:42
we're just starting bull market in some
13:45
of these emerging markets we are ending
13:47
a bull market in the united states so
13:49
the upside potential is minimal in the
13:52
u.s. relative to the downside risk and I
13:55
think the only way the US stock market
13:56
does continue to rise if the dollar
13:58
continues to fall and so in real terms
14:01
the markets gonna go down and so people
14:03
are just going to be operating under the
14:04
delusion that their portfolios are
14:07
gaining value when they're actually
14:08
going to be using purchasing power the
14:10
real way to gain purchasing power is
14:12
going to be to invest internationally to
14:14
invest in a foreign country's foreign
14:16
markets the right sector and beanies
14:18
commodity stocks and again it's not just
14:20
gold all these commodities are going
14:21
higher as a dog goes down and that's
14:23
another reason why the emerging markets
14:25
are going to do well because a lot of
14:27
them are exporter's of commodities but
14:30
also a lot of these countries have
14:31
dollar-denominated debt and as the US
14:34
dollar fall that is a huge relief
14:37
it reduces the burden of servicing and
14:39
repaying these deaths so this these bull
14:41
markets are starting they're starting in
14:43
obscurity nobody's paying attention
14:45
they're all paying attention to the bull
14:46
market that that dying and they're not
14:49
paying attention to the new ones that
14:50
are being born also want to talk a
14:52
little bit about the second day of janet
14:55
yellen's testimony this time before the
14:57
house and a couple of very interesting
14:59
conversations took place one of them has
15:02
to do with labor force participation
15:03
finally somebody called her out on this
15:06
I mean she was out there saying well you
15:09
know the labor force participation rate
15:10
is down because of the retirement of the
15:13
baby boom we have an older population
15:15
and so that's why labor force
15:18
participation is out and I've been
15:19
saying for years when she was saying
15:22
this and when Bernanke was saying this
15:23
but they were pulled it because i know
15:26
that the one demographic
15:28
group where labor force participation is
15:30
rising is over 55 it's the older people
15:34
people in her seventies and eighties who
15:36
are working like never before
15:37
they're broke they can't afford to
15:39
retire the decline in labor force
15:42
participation is happening with people
15:44
in their twenties and thirties so that's
15:47
not because of retirement
15:48
these people are retiring everybody's
15:50
got started here they never got the
15:52
first job so Janet Yellen tried this BS
15:56
and this congressman called her out on
15:58
it and said exactly what i said only not
16:00
as strong he said wait a minute it's the
16:02
older people that are working more than
16:04
ever
16:05
so what you're saying isn't true he
16:06
pointed to some studying some academic
16:08
study that just came out of my get some
16:10
college was Harvard I forget where it
16:12
was or maybe was a maybe was up from a
16:15
newspaper but hey I didn't even need to
16:17
do it academic study I've been saying
16:19
this for years you don't need to wait
16:20
for that study mean maybe you know maybe
16:22
maybe he's a listen to the peter schiff
16:24
show over the years and knows about it
16:26
that way but she just glossed over it
16:29
she didn't even acknowledge that she was
16:31
wrong and then another congressman
16:33
pointed out to EP call around the same
16:35
thing and you know she didn't even go
16:38
back and correct herself she still
16:40
sticks to her her her script that the
16:44
fall in the labor force participation
16:46
rate is due to the baby boomers retiring
16:48
even though they're not retiring even
16:50
though they're working on in the highest
16:52
percentages ever is young people and
16:54
then she was even more clueless when she
16:57
was talking about household formation in
17:00
the real estate market and why young
17:03
people are not forming household and she
17:07
mentioned that this was you know a
17:08
problem that young people were living
17:10
with their parents and they weren't
17:12
going out and informing household they
17:15
weren't buying their own house and she
17:17
said that this was happening despite the
17:18
fact that unemployment is very low and
17:21
job growth is very high and so she
17:23
didn't have an explanation because she
17:26
was asking why is this happening and she
17:28
was like well you know we don't know and
17:30
you know and it's curious because it's
17:33
happening even though we have such low
17:35
unemployment and and you know all this
17:38
job growth
17:39
well she is completely clueless three
17:41
isn't the reason that the job growth and
17:45
the low unemployment are not helping
17:47
people move out from their parents
17:49
basement is because the job stink
17:51
these are low paying jobs these are
17:54
part-time jobs she just doesn't get that
17:56
she's scratching her head trying to
17:58
figure out why all these kids are still
18:01
living with her parents because there's
18:02
all these jobs that she not realize what
18:05
these jobs pay does she not realize how
18:07
many hours people actually get to work
18:09
and also a lot of these young kids are
18:12
buried under a mountain of student debt
18:13
whose fault is that government
18:15
encouraged them to take on all this debt
18:17
had made it easy by keeping rates low
18:19
and so that's another reason that young
18:22
people can move out of the house because
18:23
even if they have a job they're spending
18:25
all their money repaying their loans and
18:27
with what's left over they can't afford
18:29
the increasing the cost to rent which
18:31
may be Janet yellen's oblivious 22
18:33
because the CPI just focuses on over his
18:36
equipment which is some completely
18:38
nonsense number that means nothing
18:39
because owners you can actually pay
18:42
owners equivalent rent the actual rents
18:44
are going up but you know the Fed
18:45
doesn't acknowledge that because the way
18:47
to stack of the specifics but I thought
18:49
it was very interesting that she has no
18:51
idea why this is happening because she's
18:53
clueless and also she was asked a
18:57
question about why us productivity
18:59
growth is so slow and again she didn't
19:01
know course she doesn't know I mean it's
19:04
partially her fault but i think the Fed
19:06
is one of the main reason why
19:07
productivity is growing so slowly but
19:10
the Fed acknowledges it but they're
19:12
clueless as to why it happens and of
19:13
course some of these congressmen were
19:15
trying to say well couldn't it be that
19:16
one of the reasons that productivity
19:18
growth solo is because of all these
19:20
regulations and she didn't really want
19:22
to acknowledge that but then later she
19:24
said well she is concerned about the
19:26
cost of regulations and she would try to
19:28
help work to reduce that but she didn't
19:31
think that economic growth will be much
19:33
higher or even higher at all if we just
19:35
had fewer regulations which really
19:37
didn't want to make sense
19:38
I just don't think she wanted to
19:39
validate the deregulation that Trump is
19:42
talking about she didn't want to throw
19:44
Obama under the bus by trying to say
19:47
that we would have stronger economic
19:48
growth if we would have had less less
19:51
regulation but of course what nobody
19:53
bothered to point out
19:54
is that artificially low interest rates
19:58
are undermining our productivity because
20:00
we are diverting resources from real
20:03
capital investment because we're
20:04
discouraging actual savings and instead
20:07
we're fuelling speculative bubbles on
20:09
Wall Street and were propping up the
20:12
government were enabling the government
20:13
to keep on borrowing and spending if we
20:16
have higher interest rates the
20:18
government have to stop spending and
20:20
that would free up resources for actual
20:22
capital investment which would result in
20:25
higher productivity rising real wages
20:27
and higher standard with it
20:29
Janet Yellen is one of the main reasons
20:31
that we don't have a higher productivity
20:34
growth and she is clueless about that
20:36
just like she's cool as the fact that
20:38
these young people living at home even
20:41
though they have jobs the jobs don't pay
20:43
enough to afford to rent your own wrong
20:45
apartment
20:46
another important development on the
20:48
weak labor a sec party secretary nominee
20:52
Andrew buzzer and he is probably
20:55
probably the best the point right i
20:57
think that Trump came up with I mean
21:00
when it comes to the Labor Department I
21:01
mean next to just getting rid of the
21:03
department of labor which is what we
21:04
should do we should have won but to the
21:06
extent that we're going to have won a
21:08
guy like pleasure is exactly who you
21:10
need guys that actually employed people
21:12
right he is a CEO of the carl's jr. and
21:16
hardee's right they employ a lot of
21:17
people they apply a lot of those field
21:19
people they provide a lot of entry-level
21:21
jobs he understands the problem that
21:25
government is creating for workers when
21:28
they try to get jobs in fact he had been
21:30
very critical of the minimum wage law
21:33
which is the main reason that he
21:35
couldn't get nominated and he had to
21:37
pull out because you have a bunch of
21:38
gutless Republicans who are afraid to
21:41
confirm this guy because you know he's
21:44
against the minimum wage i hear all
21:46
these are left of you know congressmen
21:50
or senators think oh this is the worst
21:52
Labor Department nominee ever because
21:55
he's so anti-labor he's not anti-labor
21:58
he is pro-labor the minimum wage law
22:02
that's anti-labor what does the minimum
22:05
wage law do it says to worker
22:08
there is a minimum price at which you
22:10
are legally allowed to sell your labor
22:12
it limits workers and their ability to
22:14
sell the only asset they have their own
22:17
labor and so the minimum wage is is 725
22:21
right what the government says is you
22:23
need to convince somebody to hire you
22:26
for at least 7 25 which means you need
22:28
to be able to deliver seven dollars and
22:31
twenty-five cents worth of productivity
22:32
before will let you sell your labor so
22:35
if you can only deliver five dollars
22:37
worth of productivity you can't get a
22:40
job
22:40
you cannot sell your labor for five
22:42
dollars an hour you have to get 725 an
22:45
hour and if they raise that to ten
22:46
dollars an hour or fifteen dollars an
22:48
hour if the government says you can't
22:50
sell your labor unless you can get
22:52
fifteen dollars an hour that's going to
22:54
price a lot of people out of jobs a lot
22:56
of workers will be unable to sell their
22:59
labor because they don't have enough
23:01
productivity they cannot create enough
23:02
value for an employer to get fifteen
23:05
dollars an hour maybe they can maybe
23:07
they have enough value to get five
23:09
dollars an hour but the governor's no
23:11
you can't do that and that is terrible
23:13
for labor because if my productivity is
23:16
only work five dollars an hour
23:18
what do i need i need a job so I can
23:21
increase my productivity I need to make
23:24
myself more valuable to employers and
23:26
you know how you do that you get a job
23:28
any job regardless of how low it paid
23:31
because where'd you get skills is on the
23:34
job the way you make yourself more
23:36
valuable to your employer is by working
23:38
for your employer and learning on the
23:40
job learning the skill learning the
23:42
responsibilities and then you can earn
23:44
more money but if the government makes
23:45
that illegal then you're never gonna do
23:48
that
23:48
so Andrew pleasanter actually understood
23:51
this
23:52
he understood he would have been the
23:53
best friend that labor could have had
23:56
because he feels their paint he
23:57
understands the source of their pain is
23:59
government so he wasn't anti-labor he
24:02
was pro-labor now you can say is the
24:04
anti Big Labor organized labor
24:07
yes right labor unions love the minimum
24:09
wage because it keeps out low-skilled
24:12
competition right so yes Big Labor
24:14
organized labor that represent people
24:17
that make three or four times and then
24:18
wait right people working for these
24:20
labor use
24:21
get twenty twenty-five thirty dollars an
24:22
hour yes they love the minimum wage
24:24
right but average workers average people
24:28
who don't have jobs the minimum wage is
24:30
the biggest reason they don't have them
24:32
and so Andrew cluster would have been
24:35
probably the first labor secretary who
24:36
actually couldn't work to the benefit of
24:39
Labor like what benefits labor more job
24:42
right
24:43
how do you create jobs stop punishing
24:46
people for hiring people stop you know i
24:49
said it's all the time that the worst
24:50
thing you can do an American hire
24:51
somebody the minute you start employing
24:53
people you're public enemy number one
24:54
there's all sorts of regulations aimed
24:57
against you there's all sorts of ways
24:59
you can get fine you can get sued right
25:02
so we make it we created incentive not
25:04
to hire people or if you're going to
25:07
hire people hire a few people as you can
25:09
possibly get away with try to outsource
25:11
right so what positive might have done
25:14
is recognize all the problems that
25:15
governs created for labor and try to
25:19
mitigate that damage but now it's not
25:21
going to happen because too many
25:23
Republicans were afraid to go back to
25:25
their constituents and say I voted for
25:27
guidance against them in ways i know
25:29
there was also something about siata a
25:32
nanny that might have been illegal I
25:34
mean that's I mean that's happened a lot
25:35
of people and some of them have been
25:36
approved and I guess he had to pay some
25:38
back taxes on on that but that's not the
25:41
real issue the real issue is the fact
25:43
that he had the guts to tell the truth
25:46
about the damage that the minimum wage
25:48
law does and because so many politicians
25:51
don't have the guts to stand up for the
25:53
truth when it comes to their
25:54
constituents he's not going to be the
25:56
labor second final fought on on this
26:00
week the IRS following Donald Trump's I
26:04
guess executive order to kind of
26:06
minimize the burden of the Affordable
26:09
Care Act otherwise known as Obamacare
26:11
the IRS says now that they're not going
26:15
to be requiring people who fill out
26:17
their tax returns to fill out the
26:19
question as to whether or not i have
26:20
insurance and if they don't have to pay
26:23
the penalty so basically the penalty tax
26:26
whatever you want to call it is not
26:28
going to be enforced so now you have an
26:30
even greater incentive not to buy health
26:33
insurance because remember I
26:34
this from the beginning that for most
26:37
young people paying the penalty tax is
26:40
cheaper than buying the insurance which
26:42
is the only reason the Supreme Court
26:44
held constitutional they said hey the
26:47
taxes so low that it's not really
26:49
forcing anybody to do anything because
26:51
he just you know you would just pay the
26:52
tax or the penalty instead of buying
26:55
insurance because what's the point of
26:58
buying insurance if you're healthy now
26:59
that insurance companies can't
27:01
discriminate based on pre-existing
27:02
conditions
27:03
you'd be an idiot if you're young if you
27:05
went out and bought insurance because
27:07
you're probably not going to get sick
27:08
and if you do get sick while it doesn't
27:10
matter because you can go get your
27:12
insurance askin fact because they can't
27:14
discriminate against you for
27:15
pre-existing condition just like nobody
27:18
would buy auto insurance if they said
27:21
Otto's auto companies have to give you
27:23
insurance regardless of whether or not
27:25
you know for accidents have already
27:26
taken place the bike and call up and say
27:28
hey my car was just in a wreck I'd like
27:30
to buy your insurance policy I mean why
27:32
would i buy an advanced same thing with
27:34
my fire insurance if its insurance
27:36
companies casualty company couldn't
27:38
discriminate based on a pre-existing
27:39
condition
27:40
well then the fact that my house already
27:42
burnt down couldn't prevent me from
27:44
buying fire insurance so why buy it in
27:46
advance I mean what's the odds of my
27:48
house burning down it's probably not
27:49
going to burn down so why waste my money
27:51
paying all that premium when I could
27:53
just go and buy the policy after the
27:55
fact
27:55
well of course if you could do that
27:56
nobody would buy fire insurance and so
27:59
there wouldn't be any fire insurance
28:00
company the reason that health insurance
28:02
companies can exist is because a bunch
28:04
of healthy people pay premiums and they
28:06
don't need the money because they don't
28:08
get sick that's the only reason that the
28:10
six you get paid is because they're
28:11
helping people pay in and don't draw out
28:14
but you know what Obamacare does is it
28:17
says hey if you're healthy don't pee in
28:18
your you know now they tried to convince
28:20
you to pay in with a penalty but the
28:22
penalty was too low and now the penalty
28:24
is zero and so what this is obviously
28:26
going to do is accelerate the demise of
28:28
Obamacare because now is more healthy
28:30
people decide not to not to buy the
28:32
insurance because now there's no penalty
28:33
at all now fewer people are going to buy
28:37
insurance and they're all going to be
28:39
sick and so now the cost of insurance is
28:41
going to gonna rise even faster now than
28:43
it was before and that's going to cause
28:45
even more people not to want to
28:47
quiet and it's just against the spiral
28:49
out of control and everything is just
28:51
going to get a lot worse and of course
28:54
the insurance companies mean this gate
28:56
they could be driven into bankruptcy it
28:58
is as if this happened i know they have
28:59
been making money before from Obamacare
29:01
but you know ultimately they're gonna
29:04
fail if this continues but of course you
29:06
know Trump they're talking about we're
29:08
going to repeal and replace Obamacare
29:10
it's a replacement part that I think is
29:12
the problem because if they had simply
29:14
been talking about repealing it they
29:16
could repeal it but they can't replace
29:19
it because that people expect something
29:20
for nothing
29:21
nobody expected to replace it with the
29:24
free market the Republicans and Donald
29:28
Trump have got people to expect that the
29:31
replacement will be better in that it
29:33
will provide even more free health care
29:35
for even less money and that's
29:37
impossible to be costly can't replace it
29:40
they never repeal it but they just knock
29:42
the legs out from under it so this whole
29:44
thing is going to collapse even quicker
29:45
than it would have had you know had that
29:48
the IRS not come out with this with this
29:51
ruling today's financial advisors behave
29:58
like Pro Wrestling TV commentators they
30:00
scream that the recovery is strong that
30:02
is manageable inflation is low and that
30:04
the federal reserve has everything under
30:06
control they may be oblivious but the
30:08
danger is real
30:09
looking beyond the media hype can over
30:11
the world of broader investing ideas
30:12
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hi
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